The 7% Alert applies to anyone
who experiences a series of losses totaling 7% or more of their
total account value in any one month. Reaching this level of loss
signals that it is time to temporarily step away from the stock
market for a planned time-out. You should close out all positions,
and cease trading for a period of one to four weeks. This time should
be spent re-examining your trading methods, the markets, and your
personal strategy to determine what is causing the losses.

The RightLine Risk Control System limits stock losses that occur one at a
time by setting a Maximum Risk Percentage for each trade. The Seven
Percent alert limits the combined individual losses to a reasonable,
planned amount. This minimizes your overall losses BEFORE they get
large enough to inflict serious damage. Taking a break from the
markets allows time to find out why the losses occurred without
having your thinking clouded by concerns about current positions.

Remember, every 50% loss began as a 5% or 10% loss. Having the
courage to take a small loss quickly is the only protection you
have against the possibility of even greater losses.